ATO Interpretative Decision

ATO ID 2006/117

Superannuation

Superannuation Guarantee: Article 8 of the Portugal Agreement on Social Security - certificate of coverage
FOI status: may be released

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Status of this decision: Decision Current

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Issue

Can the Commissioner use Article 8 of Schedule 9 to the Social Security (International Agreements) Act 1999 (SSIAA) to enable an employee in Portugal to be issued with a certificate of coverage indicating they are covered by the Superannuation Guarantee Administration Act 1992 (SG(A)A)?

Decision

No. The Commissioner can not use Article 8 of Schedule 9 to the SSIAA to enable an employee in Portugal to be issued with a certificate of coverage indicating they are covered by the SG(A)A.

Facts

The employee is working temporarily in Portugal for an employer entity that is not a resident of Australia.

The employee was not sent by an Australian employer to work temporarily for the employer in Portugal.

The Department of Social Security of Portugal (DSSP) requested in writing on behalf of the employee that the Commissioner of Taxation (the Commissioner) certifies that the employee remains subject to the superannuation guarantee law for a period determined by the Commissioner in respect of the employee's temporary employment in Portugal.

DSSP is prepared to accept that the employee remains subject only to the superannuation guarantee law in Australia if the Commissioner so certifies.

Reasons for Decision

Schedule 9 of the SSIAA contains the agreement between Australia and the Republic of Portugal (the Portugal Agreement).

Article 8 of the Portugal Agreement states that the Competent Authorities will, in accordance with their countries' respective legislation, decide on the social security coverage to be applied in the best interests of a person. 'Legislation' for the purpose of Article 8 is defined in subparagraph 1(f) of Article 1. This subparagraph makes reference to Article 2, which outlines the legislative scope of the Portugal Agreement. In relation to Australia, Article 2 differentiates between the two independent bodies of Australian law that apply to the Portugal Agreement by listing them separately under subparagraphs 1(a)(i) and 1(a)(ii).

The SG(A)A is a law referred to in subparagraph 1(a)(ii) of Article 2 and only applies for the purpose of Part III of the Portugal Agreement. Part III only contains Articles 9 to 13 which operate to avoid double superannuation coverage.

In contrast, Article 8 is contained in Part II of the Portugal Agreement. Part II only applies to the payment of social security benefits by the competent authorities to beneficiaries. Part II does not apply to the making of superannuation contributions to either contracting party's retirement schemes, which may give rise to a double superannuation liability avoidable under the double coverage provisions contained in Part III of the Portugal Agreement. Hence it is inappropriate to invoke Article 8 to seek certification of coverage under the superannuation guarantee law for an employee who is engaged in an employer/employee relationship to which the SG(A)A does not apply.

Therefore, as the employee is not subject to the SG(A)A, and the Portugal Agreement does not allow the Commissioner to consider Article 8 (including the phrase 'in the best interest of a person') in determining an application for coverage under the superannuation guarantee law, no certificate of coverage can be issued to this employee.

Date of decision: 3 June 2006

Year of income: Year ended 30 June 2006

Legislative References:
Social Security (International Agreements) Act 1999, Schedule 9
   Part III
   Part II
   Article 2
   Article 8
   Article 9-13
   subparagraph 1(f) of Article 1
   subparagraph 1(a)(i) of Article 2
   subparagraph 1(a)(ii) of Article 2

Siebel/TDMS Reference Number: 5035750; 1-5KMB02J; 1-8D4RRZJ

Business Line: Superannuation

Date of publication: 28 April 2006
Date reviewed: 3 June 2016

ISSN: 1445-2782

history

	Date:	Version:
You are here →	3 June 2006	Original statement
	24 June 2019	Archived

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